PHOENIX, AZ, March 17, 2015 /CNW/ - GWR Global Water Resources Corp. ("GWRC") (TSX: GWR) today announced that Global Water Resources, Inc. ("Global Water" or the "Company") has reached a settlement agreement for stipulated condemnation (the "Agreement") to transfer the assets of Valencia Water Company, Inc. ("Valencia") to the City of Buckeye ("Buckeye"). GWRC owns an approximate 48.1% interest in Global Water.
The Agreement, which was unanimously approved by the boards of directors of GWRC and Global Water, is subject to approval by Buckeye's City Council at a Special Council Meeting which is scheduled to be held on March 19, 2015. Once approved, the transaction is subject to Buckeye receiving sufficient financing and approval by the Maricopa County Superior Court.
The material terms of the Agreement are as follows:
- Buckeye to acquire all of the assets of Valencia and assume the operations of the utility on closing;
- Buckeye to pay to Global Water US$55 million on closing, subject to certain post-closing adjustments;
- Buckeye to pay to Global Water a growth premium equal to US$3,000 for each new water meter installed within the prior service areas of Valencia for a 20-year period ending January 1, 2035, subject to a maximum payout of US$45 million.
"Although Valencia is a valuable water asset in a high growth corridor, it is not a utility in which Global Water can implement its integrated water, wastewater, and recycled water provider model as the City owns and operates the local wastewater system" said Ron Fleming, President and CEO of Global Water. "Additionally, the City of Buckeye has its own water systems on all sides of Valencia, which limits Global Water's ability to grow our certificated service area within Buckeye."
"For Buckeye, the consolidation of Valencia into their existing systems will provide long-term benefits to the City and its customers, including an enhanced ability for regional water resource planning, which Global Water promotes within the industry as well," continued Mr. Fleming. "For Global Water, the disposition strengthens our balance sheet and provides great optionality for growing our company and shareholder value by focusing on our core business model."
Global Water expects that the closing will occur in the third quarter of 2015.
About GWR Global Water Resources Corp
GWRC was incorporated in British Columbia to acquire shares of U.S. based Global Water and to actively participate in the management, business and operations of Global Water through its representation on the board of directors of Global Water and its shared management of Global Water. GWRC owns an approximate 48.1% interest in Global Water, a pure-play, high growth, water resources company located in Phoenix Arizona that owns and operates regulated water, wastewater and recycled water utilities.
Cautionary Note Regarding Forward-Looking Statements
This press release includes certain forward-looking statements. These forward looking statements include, but are not limited to the expected timing and completion of the sale of Valencia, including the expected timing and completion of the City's approval of the purchase of Valencia, and other statements contained in this release that are not historical facts as well as statements identified by words such as "expects", "anticipates", "intends", "plans", "believes", "seeks", "estimates", or the negative of these terms, or other words of similar meaning. These statements are based on our current beliefs or expectations and are inherently subject to significant uncertainties and changes in circumstances, many of which are beyond our control, including the fact that the expected completion of the sale of Valencia is subject to closing conditions, including receipt of financing by Buckeye and court approval. Actual results may differ materially from these expectations due to changes in global political, economic, business, competitive, market and regulatory factors and other factors discussed under the heading "Risk Factors" in the Company's most recent Annual Information Form. We undertake no obligation to publicly update any forward-looking statement, except as required by law, whether as a result of new information, future developments or otherwise.
SOURCE GWR Global Water Resources Corp.
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